Tax cuts on the way?

Tax cuts are likely in Monday's pre-budget report, but we could be paying them back before too long. John Sparks reports.

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The report, out on Monday, is expected to include big tax cuts worth at least 1 per cent of Britain's total output.

It is also likely to include increases in public spending.

Alistair Darling will tell the Commons that the giveaway, meant to stimulate the economy during the recession, will be funded by borrowing and will not be permanent.

It is thought that Darling will say that his plan will leave Britain with a £100bn debt that will have to be paid back later through higher taxes.

However, the Conservatives and Liberal Democrats say the plans are flawed. The Conservatives say they would guarantee loans made by banks, while the Lib Dems say the government should lend directly to businesses to boost the ailing economy.

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